don't you think if you had to do it over again, you would have been and would have worked to be a little more aggressive in public confidence by doing what you needed to do sooner? in other words, six months of selling a car that could, and turns out would potentially explode and need different safety procedures. didn't we find as a country that you shouldn't have kept selling this relatively new car the way you were? >> the battery, as you know, is well used throughout the industry. ..

any customer when you have a where from seven to 21 days to remove yourself from the car if there is an accident. after 25 billion miles on the road for this card there has never been an incident anywhere close to this. there have been no injuries, and so we felt as we found an extreme simulated lab fire that

to seven days that this car was safe. as i said in my opening comments, we were not satisfied with this. he wanted to address the issue with our customers, for the law requires, but the cars back, media just as commander being implemented over the last month. >> to characterize it, to make sure you're understood, is fair to say that what you have learned is the entire nation of repair facility salvage yards and other people involved in the automotive industry by going to have to learn and adapt to a lot of new procedures that are continuing to evolve if we are to ensure safety of handling of these new components both because of high voltage in a potential fire and explosion. that is what you have learned from this, is that those of us who are not -- we get out of a car, but will we go to the salvage yard they need to know what, the tow truck company needs to know it. all the other people need to know it. that is, in fact, the risk that you found after six months.

>> before we launch this car, mr. chairman, we conducted nationwide safety tourist across the country to make sure that the public safety was paramount. that is the core values of general motors. we talked to the national fire protection agency, the international association of firefighters, international association of fire chiefs, the a source jim -- association of public safety communication officers, fire chief, police chiefs, 911 call centers to make sure that we have this understood. we now trained over 15,000 people across the nation on the city protocols. he will have to go back and make sure that it is well understood that the new safety protocols. so i think every organization, an individual should evolve and learn, and we have learned some lessons that i think will benefit the entire industry. >> thank you, mr. chairman.

>> thanks you, mr. seale. >> we're pleased to be joined. we have four minutes, but only 67 votes of comment. >> i will be very quick. >> to determine from maryland. >> first of all, as a member of the board of ministers of the naval academy of want to congratulate you on being named a graduate of the year. thank you. -- you herve said. collateral damage from this hearing. as the head, you are assuring the public. listen up. the vote is a safe vehicle. is that right? >> system sir. >> actually, i view this as a positive. it is our chance to get this before the american people. you represent the american people to get our story before you. we have taken ads in the paper : with this that the investigation

is incomplete. i do think there has been collateral damage. it will have to work hard to get back. >> i wanted thank you for your leadership and want to take the smaller to think of the employees of gm for producing such a great product. >> it will be about a 20 minute break. we will be back for our full committee folks who want to ask questions. we will keep that is because we can. >> the committee stands in recess for 20 minutes more less. [background noises]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> the committee will come to

order. i will recognize the gentleman from pennsylvania, mr. kelly, for five minutes. >> apology as for the delay, but we -- and forgot that we are going to have a very appropriate ceremony. you're recognized. >> thank you. thank you for being here. uni have never met. we have never been a socially are never done anything from a business standpoint. i buy a lot of cars. we are linked in a different way. we grew up in boulder, pennsylvania. you yourself, great relationship. i know the reason you are here is not because of any monetary gain that general motors could that possibly offered you because really your decision to go with gm was made with your heart and now with the head because he could have stayed in the private sector and been a lot more rewarding and you would not be back here today going through this. but the question goes back,

nothing to do with general motors, but it does have to do with the apparent partnership that the government has with gm. the reason i bring that up, and i know you say no, but that is not true. i know, that is not true, but you can't get away from certain things that are already on the table. if we go to a slide to my ticket is on pace three. there are two slides. in one of the slides, this is some advice coming from the administration. it is kind of a marketing thing. one of the slides -- this is 2009, treasury officials directing gm and how we could structure press releases. but represents the government ownership be removed. then we go to another slide in

showing you any no from may of 2009 ended talks about a member of the automotive task force telling general motors to coordinate with the uaw, united auto workers about the termination of pension plans. this is at a minimum this could get messy. the uaw should probably be brought into the loop. having served on a lot of dealer councils and been part of a lot of that group's where we try to get the message out about how big our cars were and have better deals were, the zero lovers, what we through some of that stuff. it is, perception is reality. this hearing today is not about the chevy volt, but about nhtsa. a great partnership, and that told you early on that my dad started in 53 after being a parts maker in a warehouse.

my relationship has never been a quality, always been clear and transparent. i know which side of the table i said. the mother manufacturer and distributor. actually sell these. you looked at these things, my gosh. if it really isn't government-run, if the government really is at arm's length away from this, the sharing of disinformation or how we will market these different messages, how does that happen if it's not that way to iraq and how does nhtsa sit there and say, no, no, no predated the same way we always do. as a matter of fact, they didn't . again, payroll products. and the stand. nothing to do with angels, but it does have to do with the we're trying to do. we can compete with anybody in the world that any product at any level. our success has been driven. producing cars in mass quantities the people want to bite.

one advocate those two e-mails, if you're really not involved and they really don't have an influence y deasy melson by back-and-forth the mire of the advising general motors on how they should messes these different things? rise me of what you're doing. there are a lot of different things. he speaks highly of you all the time. if you could just tell me to understand that help the american people understand it would appreciate it. >> thank you for your questions. i want to make something perfectly clear. i joined the board in july of 09. deasy mills preceded any knowledge or specific odds that i would have the situation. i would allow when i was in the deal merger and acquisition business, there is a lot of conversation back-and-forth when you are about to put money into an investment.

so possibly that is the context, but that is just pure conjecture. i don't know. i will say this, and i mean this as sincerely as i can. when i was first queried on the possibility of joining the board of was clear that i did not want to be associated with the venture, company as great as general motors is and as important as i think it is to this country's manufacturing and industrial base, if there was going to be government involvement. was the company going to be allowed to function as a business? and in my tenure both on the board for the first year from 09 to september of 2010 and then the subsequent year-and-a-half i will testify in front of the good lord that this administration has never had the presence in the border more any input on the operations of the business.

u.s. come more specific question , but nhtsa and its involvement with us, what did they know, when did they know what, i think the administrator and i have commented on that. if there is any question in anyone's mind that they gave us a free ride to live the last two months of negative publicity and the fact that i am sitting here is blueness, we will go along the future. >> i yield back. >> i think it's a lament. >> that gentleman from virginia is recognized. >> thank you. welcome. the chairman of the full committee indicated the nhtsa study was done roughly halfway through the number of sales that

currently have occurred. that is to say, i think he said that there were above 8,000 volts on the road. this happened at around 4,000. is that right? >> sure. quite a few less than that because we saw 1500 plus in january alone. a ticket has been gaining momentum. what has deposited two or 3,000. now, of the 8,000 families or consumers : how many have blown up or have biased? >> none. >> i'm sorry. >> none. >> none. now, the only example of a safety concern with respect to that occurred in a laboratory? >> no. to be precise the first one occurred in the fields. a contractor, i guess a

contractor, nhtsa, it was a test facility in wisconsin. we hit it with a severe side impact, and did had alongside the road with three other vehicles to the weeks later a fire occurred, and it took us awhile not only to understand which vehicles started the fire and under what conditions it happened over the weekend and then we had to find the root cause, dissemble the battery, you some pictures of it. it was not all that easy to ascertain precisely what happened. subsequently tests were conducted to try to simulate that again because you could have a bad test. >> sure. >> we ran tests. we crested again. we could not replicate a fire with the same conditions. we did not the power do anything. >> could not do it. >> i was listening to the chairman of the full committee questioning you. in the process of asking a

question he asserted some pacs, and i want to make sure that you either do or do not concur. the special, in light of this test, you know and it is not applicable to be replicated, we need to give special instructions for people so that it does not explode and blow up, you know, if you are taken by tow truck or put in a storage facility or a jackyard were in a garage because there is reason to be concerned. i think the kernel of the issue is what do we do in a post-crash multi day, multi weak environment if we did not the power of the battery? the lesson learned is after a week to three weeks we could not simulate the real world the conditions that race. step two weeks, we had to pull the battery out, pier said, and

essentially this will be a slight exaggeration, address the battery in coolants and then a week later it occurred. and it was not an explosion. that has been a little bit of hyperbole, i think. there was a fire. it takes awhile. and then it does burn. when that occurred even in this simulated laboratory extreme non real world environment they initiated a formal investigation and we went to general quarters. >> and u.s. this deal are so concerned about this u.n. out about one yourself. >> i bought one of the karzai was returned. just a lesser. >> less that the president alluded to the lithium battery research and development of advanced lithium battery. if i recall at the time we

adopted the recovery and tear in congress before we made the investment in advanced lithium battery research the u.s. manufacturing share, something like 5%, and the projection, like my next year, with 40%. is that correct? >> enough familiar with those numbers. >> and a brief time may be venturing the advanced lithium batteries has expanded. >> that's correct. >> and briefly gm, before and after the bell of kiddy just refresh my memory in terms of your world market share. >> our world market share today at the end of 2011 stands right around 12%. roughly one that of every eight vehicles.

through the end of 2011 it was the first time since 77 that we gained market share two consecutive years zero. >> and the returns to number one. >> just tell us sir. >> thank you, chairman. >> i think the gentleman really quickly. just to be clear, the protocols prior to this investigation and assistance were commonly understood common-sense common knowledge to drain the gas tank and to disconnect the smaller battery. >> in a conventional car, yes, sir. >> okay. >> and so for an electric vehicle off the particles were the same tone disconnected twelvefold country in the gas tank, but do nothing with the larger lithium ion. >> it automatically disconnects from the circuitry. >> the protocols for the

electric vehicle words if this same as for a non electric vehicle. disconnect both batteries, disconnected battery operations, drain the gas tank. but that was common knowledge. >> yes. i want to make sure i am perfectly clear. >> okay. >> that was my next question. >> the protocols today are disconnected battery which entails both batteries, drain the gas tank, and in your word d. power the larger battery which means trade the : >> node. >> tell me. >> destroys the battery. >> what does that mean? >> think of connecting a giant lightbulb to the battery and just run it down. >> okay. okay. got it. >> sorry for the and articulation. >> thank you very much. welcome to the committee. i would find it very difficult to imagine an america that did

not make its own cars. so i am pleased that the president was able to report in his state of the union the progress that the car industry has achieved, and that would like to quote one line and put his whole statement in the record with unanimous consent. he said today's general motors is back on top as the world's number one auto maker. a report that i read last week said that there are over 700,000 jobs created by the auto industry now in america, and i would like to put the report and the record. >> yes. >> okay. >> i think that it is clear that this innovative car that gm is made has been caught up in the middle of politics. some members appear more interested in making wild allegations for political purposes than in recognizing

their promising technological breakthrough. i would like to ask you, and give me a yes or no answer, is it true that the volt was first shown at a general motors and electric vehicle concept at an international auto show in january of 2007 more than two years before the swearing-in of president obama and the company's filing for bankruptcy? >> yes, it was shown at the detroit auto show. >> and just curious, how did you get here? fly, take a train, drive, how did you get to this hearing? >> i drove a volt crises drove a volt. okay. and can you tell us how the volt is selling and what is the customer feedback? >> well, it is rated, for my customer satisfaction point of view is rated at the highest rate in the car as ever done, 92 percent of the people highly approve of the car that are.

the highest recording ever. >> and will the technology developed for the volt be used in other vehicles? >> there are derivatives that amount of our research and development and the project application of it volt another application cars that will benefit other vehicles and our fleet, yes. >> and how many miles does the typical voter -- volt owner drive? palin can you go? >> thirty-five, sometimes more. interestingly temperature dependent. really colder really hot. let's say in the typical day that is to bridge got 35 to 40 miles. will we do have is 80 percent of the american public derives less than 40 miles of less per day. the car was designed for that mass-market. i drove a test vehicle before launch. twenty-five to roughly

20500 miles of venue's 2 gallons of gas because of driving patterns were such that we did not drive 15 miles in one run. >> so how often do you have to fill up? >> it depends on the usage pattern to be driving 35, 40 miles per day you may not have to fill up for months. we have instances and testimonies of some of the blocks of people drive, eight and 900 miles. your job in 100 miles per day, you will see a transition. it is really important to understand, this car is always driven by an electric motor. the gas engine is relatively small. there is no mechanical drag on the combustion engine. all a dozen stars the battery. >> and what are your future plans? >> well, i think this is been a good exercise for us because it's got everything out of the table and we have a fair hearing we will start exporting it with the enhancement.

not only europe, but asia and china in particular. >> everything you say is true, that you can get such mileage, you can drive for months if not driving that long, you cannot go up for two months or once every two months and you get such great mileage and safety and so forth, why aren't other manufacturers of cars copying and they volt? why aren't they building their own version of the volt? >> there has been interest by some of our competitors to license the technology. >> to you on the technology? is an american-owned? >> yes. >> it's a patent. >> yes. >> as a you could call lot to it. >> yes. so this fire scenario, it's seems to me that you have

responded in a very unlike gm wait. no offense, not like a big corporation, but responding very fast to provide a solution. has this fire happened in any other real life accident or other accidents? >> we have 25 million miles driven on the cars that are in the public domain. there has been no documented case of any fire of any nature on the volt? >> and i have heard that some of the consumer of the groups and what start groups have given new ratings. did you give us what those ratings are and the safety watch groups? can you elaborate? rated five stars, not only by nhtsa kamala by the international institute of highway safety for occupancy safety. so five stars in the arena.

we want the consumer reports. the highest rating in the customer satisfaction that they have ever seen. when we close to -- when we were first notified of a formal investigation we immediately offered loaner cars or the opportunity to sell the car back to the company. at the same time we embarked upon a very aggressive and active effort to come up with enhancements to the protection of the battery in which we have done and that will be implemented over the next sample of weeks. >> i would like to commend you and your company for this innovative addition to the world's and congratulate you on living in the right direction to reduce our dependence on foreign oil and eliminating, i would say, a harmful pollutants in the

air. a wonderful technology. the problem my support and the bailout of the other industry. it's an american success story, the american dream, and i'm very proud of you and your company. thank you for being here today. >> thank you. >> with the chairman deal just for a moment. i saw my friend put up a slide referring to the e-mails between gm and the department of treasury concluding that the u.s. government's was somehow running gm. now, i just want my friends and know that we really looked at this very deeply, and i wrote a letter dated june 209th 2011 which i don't know. i'm guessing you may not have had a chance to see it because what is effectively did is to debug any evidence of collusion

ended june 209th 2011 letter to the chairman. i would specifically site pages six and seven. when i wrote this letter i have not received any response to indicate that there was a dispute as to what was said. i just wanted to share that with my friend. with my chairman. we looked at this end we need to effect -- effectively did but it. >> i ask unanimous consent. >> i would just point out, the e-mails of the males. when the people and the administration telling people at the company how they should structure a press release and right things, i think that speaks for itself as well. ..

i think either of those two assertions might interesting to contrast my good friend. i think ever on the committee, every american is pleased by the success of general motors. but that doesn't dismiss the fact that even today, half of the board are approximately half of the board were selected by the administration to sit on the

board, the taxpayers invest $50 million net company and there's all kinds of incentives, tax breaks et cetera for people to purchase this project. those are the facts. >> agenda minutes correcting out that appeared >> he talked about the totality to situation. >> my friend is correct in asserting other thing was structured. i know some my friends are not. i want to say if you look at the e-mails, your government's role in characterizing what the government was doing i believe not trying to direct gm. so i want to thank you for giving me the opportunity to present that. thank you. >> on the subject if i could also enter into the record the committee on oversight for him on the administration to this issue. without objection so enter and i

think -- >> i don't mean to have the last word, though he is the term the government's investment. this is taxpayer money. we are not a monarchy that showers favors bond people. we take it out of hard-working taxpayers pockets that we decide to get there. somehow we have the ability to pick and choose winners and losers. now with their own money, that taxpayer money. we made a great decision for you, taxpayer. really? really? $50 billion. that is a lot of money in a time that her torontonians and it doesn't matter to them because it's not their money. we are entitled. the truth of the matter is they have been involved in this far

deeper than ever should have been to begin with. distractors in the thunder run gm. he has a history of running great companies. he does not need somebody who's never run a company to tell them how it's going to spend the money. i'm going to tell you. if you want to throw $7500 as a tax incentive in pennsylvania another 3500 talk about rate of sales. it's your product that has to turn to your dollars. this is taxpayer money that's being used. i'm not going to yield because i've got to tell you something. there's a a disconnect in the south of the real world works. general motors does not need the help of the taxpayers to subsidize their cars. there is $7500 on a cruise. you want to see that? you on a per thousand people back to work? you can do it in a lot of different ways. stop taking it out of my wallet.

and i'm deeply offended by the attitude down here that somehow this merry-go-round is going to continue to spin and there's no consequence. there are a lot of important things that happen, unintended consequences by people of never done it, don't have skin in the game and are spending taxpayer dollars. it's utterly ridiculous. this has nothing to do is general motors. this has to do with an administration that can't keep its fingers out of the pie. >> if i made in response just briefly -- i thought about the safety of the vote. it may have other dimensions. i want to tell mr. kelley who is my friend, i did not vote for the bailout of the banks. i didn't want the government to be involved in picking winners and losers. the american automotive industry with on the verge of collapse and i felt given the privacy of that american automotive industry to our strategic industrial basis including automated deal aerospace and

shipping that the prudent thing to do would be to make an attempt to rescue it. sheehan's management has helped to conclude it. but again, i don't see in my good friend and we have strong differences of opinion. i understand and respect that. but i just think that the evidence of collusion that is offered here hasn't been supported by the facts. and again, i respect you greatly. >> with that, want to thank mr. ackerson. i know you're a busy man running a big company. we appreciate what she do and appreciate the time you've taken to be with us this morning. we will quickly move to our third witness and staff can help a set that up because we have to get out of here in about 15 minutes. [inaudible conversations]

>> in a few moments, it german chancellor, angela merkel spokes on the future of the euro zone.

>> the annual world economic forum began today in switzerland with remarks by german chancellor, angela merkel. she spoke for 45 minutes about the global financial crisis and the future of the euro zone. [applause] [speaking german] >> translator: professor schwab, madam president, allow me to welcome my colleague and prime minister of denmark,

eveline widmer-schlumpf to welcome on behalf of all the heads of state or government because he's currently in the presidency of the european union. the excellency, ladies and gentlemen, let me tell you that i very gladly accepted your invitation to come here again. and particularly to come here this year to the world economic forum, the annual meeting after out is in many ways the climax of maniac chickadees that you have during the year. d'amato, the great transformation, shaping new models that certainly is more than appropriate. it is also however very ambitious. but it's always been very ambitious kind of faith. what is needed as it were a big briefing that other sense 2008,

2009, we've been debating time and again what lessons can we drop from this big global financial and economic crisis. so let's take a moment and reflect a question that was asked last year, what sort of lessons have we learned from the global financial and economic crisis? and is it sufficient what we've learned? i think the answer to that is even and this year they still not quite sufficient. if we are talking about having a rethink on breaking new ground, i think there is still room here for improvement. because if one is realistic, even perhaps pessimistic, one has to say that although in 2008, 2009 we have experienced very clearly that there is a very close interdependency we have not been able to bring the bill around to a successful conclusion of the international trade around the country.

during our last meeting it was sad that there are increasing signs of protectionism that is rather on the right. we have made certain programs as they got regulation to allow g20 meetings and found rules and regulations for the basis that is important. the big important area of shadow banks will have to read another two years until we come to satisfactory regulations. after all, there was a glaring lack of regulation that brought us into this predicament. let me perhaps not elaborated on at great length about the financial transaction tax, but had we all said we have to show sure citizens that we are not only paying some kind of tax on

each and every product, but not on financial products. we have to create that it doesn't look promising and the outlook to rio will be that we will meet in rio de janeiro. but if we say, is there a follow-up agreement on the kyoto meeting, we have to unfortunately say there's going to be a time where we have one binding commitments and overall policies and more. so there's the month they released to be done to the global leaders and we also have to come up with the necessary speed. so we don't allow for unnecessary and irreversible damage to be done. you are certainly is a continent that currently meets to debate new methods. we have one for interdependent we are one of the same with the

same global community, but we've also learned in europe at the financial and economic crisis that started in america left a deep imprint on europe and was still walking on the fallout of trying to redress it. so europe is a great admit that it's a political project. and i'm standing here before you convinced that we and i think i speak on behalf of my colleagues wish to further develop this great achievement on the anniversary of the signing of the treaty's, we said we are being united in europe. it is to our great black that we are united and we will not be happy and lucky if we do not show this commitment. this year marks the year where the billions of the planets respond. if we look how it's changed since the second world were

coming your way piece and i think we cannot overestimate what a success is worth after centuries of war. at the time, there were 2.5 million people living on this planet and their event the europeans fear they have not grown in size, but the world these days have 7 billion inhabitants. and we have about 7% of the population, 7% of the roots gdp in you near. both of these figures will shrink. on the question of war and peace, democracy and freedom, another question has been out of to that. how can we actually maintain position in this world? how can we bring our interest in her way to ban. this is only possible not for individual european countries, which we have about 1% of the world population because like

the rest of europe we have a demographic problem, the tendency is rather going downward. we made others to bring our way today. so we are actually lucky to be able to be with others and to shape our common future. this motivates us to go through this crisis and to come out strength in at the end of this process. what is that the foreground of discussion is quite often the problem of competitiveness and this is why many people call this the southern debt crisis. but it's also become very clear is that we have difficulties and weaknesses of competitiveness in a number of european countries and it's even more difficult to combat. in those countries which share a common currency and monetary union has made progress to an extent where one decided to upload the europe, there is a

clear lack of political structures of the necessary underpinnings to make this project work. now we will not become faint hearted in the of this challenge. i am quite sure that this is an analysis that is shared basically by all. those deficits that have accrued over the years and this means the not going to be with one sort of waking up a magic wand we will be able to get rid of this. but we are resolved to do what is necessary because the structural weaknesses because of the global financial and economic crises have constituted were much more acutely felt. we have to address them. we would probably have not had to acknowledge that there are these weaknesses at some point in time. but now we really have to do something about it because we have a clear he clear erosion of confidence on behalf of the rest of the road. i don't believe for able to cope with this.

but the question needs to be, do we dare in europe? in the year two says we are ready to be more european. this is a good message. there are different areas to show we are willing in budgetary discipline, not only because were talking about or should see your finances, but because we are talking about sustainability the showstopper effort. a stable growth. not only for europe, but the whole of the world had a stable situation in global economy sustainability will have to be the trademark of future policies that we come to stability. so the budget area and the area of competitiveness, link to that also, jobs and essential and crucial area. people will not believe in europe if there is to high unemployment. and thirdly, solidarity. showing solidarity towards each

other. this in turn is also next prescient about willingness and conviction that we belong together in the world outside is expecting us to stand up for each other. if we think of the 21st points i would mention of authority been dubbed by countries over the past year, i was told that this is not sufficiently acknowledged by that many people. maybe it's not sort of really seeking all that clearly by people attacking portugal, partly also increase. maybe not always to a certain extent. what happened by spain. a lot more has actually been done that we have seen in the past and two dozen -- until 2010a what you're up to be the

most competitive continent in the world quite frankly quite obviously we have not been able to achieve it. but over the past few years, we have seen that something needs to be changed here. so it is not only austerity measures. i know each and everyone is talking about this, but this is not only in and of itself of the offense, but also structure and reforms that lead to more jobs are essential. and deeply convinced that if you look at all the different examples we've seen in europe that authority undergone those things. sweden, for example, or look at the labor market reforms that we have launched in germany. they have brought about a massive change for the better in germany, for more than 5 million we have come down to two. are we all know this takes longer than 12 months or 18 months to achieve.

and it is extremely important that we are there for the duration. but we don't lose patience. that we remain steadfast on this course of reform. and since time so that manners are moving so quickly that people tend to be very impatient. we still have to mention to each other that this is necessary. in only a few days we shall have an extraordinary meeting of heads of state of government of the european union. we will also have a spring council and on both of these jobs and growth will live very large over the addenda. the president of the european commission said we have 23 million companies in europe. we have 23 million people who are out of a job in europe. each and every one of these companies were to employ a person, we would've solved the problem. i know this is simplistic for you, but it is to think of it in this way that we have no really

truly mobility on the labor markets among european countries because we have not yet had such a convergence of a labor market. we have to look at which countries have made the best experience. we have to look at those benchmarks. we have to let the legal assistance underpinning those. for example, even though labor legislation may not be an area where there is european competence, we need to take a closer look at that. we also have to reflect where are funds that perhaps do not make the best and most effective possible use of their money is. how can we address that? how can we probably set up partnerships between countries that it made very good experience in certain areas because they think it is really urgent and necessary but particularly young people can make the experience that there is progress.

if their 20% unemployment, even 40%, gives a great miracle that she's seen many, many young people not being exactly convinced that europe is a good option for them. we are convinced that the danish presidency is going to pursue them together at the european commission and accident might come independently of whether you blog to the area or not. this is a project that we can all join in on. we have, for example, bureau that allows us to do that. there's an amount of people that ask us what our commitments in europe and more solidarity? i think in europe we have now come to a point where foreign policy gradually seems to be calm a common domestic policy. we have to debate what shapes and forms the single market to take tiered we have to be candid

and honest here. there's no use to always sort of say we are so lucky. we are so fortunate to be united in this great europe. that is true. but if future generations are to say the same thing, that it is incumbent upon us to turn this europe into a working one, into a function in europe, which means we have to be ready to transfer more competences to you. we have stability and growth. we've had this in place for many, many years. but the stability and growth pact was not -- was not captured. germany and france haven't even watered it down at the time of the lisbon treaty was drawn up. it was that the european justice will not be given the competent to pass a ruling if we infringe upon the rule. some in the end, they are saying they are promising things they don't really keep.

and that is news all over the world heard so the real message of the fiscal compact that we are trying to agree on right now is that each and every one is to introduce the so-called debt break and do this inscribed in the constitution and the european court of justice for monetary whether this is actually done. so we are no longer using any excuses, nor are we deluding ourselves are deluding others. we are opting for this and this is obvious because otherwise we will lose credibility. but in telling you over the next few years, there have to be more steps of integration. this cannot be the last one. we'll have to make more progress in the interest of our competitiveness and job creation as i said. we can also argue, why do they make these incredibly ambitious

appeals to us? i know that germany, some people say it's because of economic imbalances and whether it makes sense within one comment for monetary area to actually look at economic imbalances. i mean, i could do the same thing for germany because it traditionally is much stronger than this. but it's true there are tensions right now in the area. germany is going to participate in reducing such imbalances in those areas, where we see unfair barriers. for example -- but if these imbalances come out of different levels of competitiveness, that brings us to a very interesting point. do we wish coherent and consistent the? that all this oil is down to the

lowest common denominator. or do we wish to look at who actually has the best practices, who could serve as a benchmark for all of us? then we have an opportunity if we follow those to be global players. it is not only cohesion at all costs that we should be after, but what sort of role can europe play in the globally interdependent world? and so, we cannot say because for 50 years we've been at the very top we are confident that we will remain there for the next 50 years. now, quite the contrary. we have to work with us every day. we have to have competitive products and arranged that people like to buy over the world. we have to be innovators. if we are not able to do this, that for many years to come we will be an interesting place to take a vacation and, but we will not be able to maintain or even increase prosperity for our people. so what is important is not as too strict to her, who is less

strict. what is important is creating and maintaining prosperity for europe of the future and i think we ought to be ambitious in bringing this about. [speaking german] >> translator: which is i'm firmly convinced we need to continue to work on this. obviously there are certain first steps that we have already made and they bring us closer to a fiscal compact. but if i look at the discussions that are still raging, how can we be more cohesive? and i would say that we can be even faster and more resolved in bringing about changes. is your actually growing closer together? that is what's happened over the past few months. there is a tension still. one can be very open and addressing that. they are your member countries and nine-year member countries. we have to be very careful that

this remains a common europe, were obviously certain countries work more closely together in certain areas than others, but i'm convinced we we can keep this common europe together. now, how do i measure this solidarity of european members for each other and may your area? i find the impression that internationally people seem to use a figure stick, the degree to which we are willing to be liable for each other and we are willing to set up a file, the extent to which we are willing to actually spend money. that is a very controversial issue in contentious issue. it is quite a lot to do also with where you actually come from from different cultures. we have set up a temporary rescue mechanism in the shape and form. we have 770 billion guarantees in the market only say, well, 440 really in real money because

they want to be aaa with the necessary programs. portugal, ireland and also creates can refinance. then we have rendered this umbrella more flexible. no one has recalled to it. there's a good day. and then we said, let's set up a permanent mechanism because that is a clear acknowledgment that this is not just a short-term exercise. 550 billion capital had been paid because this is going to take the shape and form of an instrument and international law. and people say this is not sufficient, although by the end of the year, what is supporting our banks on a three-year basis. but people say this has to be

doubled and we would leave you others say. it has to be trouble. then we would actually be true believers in your solidarity. now, that brings me to the question, but for how long will this be credible because if people then say, well, show us whether you actually have the money, are we still credible? allow me each and every of our countries in europe is a strong country. some little bit stronger, others a little less stronger. people believe germany is particularly strong. true. germany is quite strong. it's particularly big compared to others. but it's not as if we were saying we don't wish to show solidarity. we are not willing to enter into any commitments. that is not true. we have said right from the start that we wish to stand up for the euro. what we don't want is a situation where we are forced to

poplin something that were able to fulfill. the members are promising something that the markets really attack us, we will not be able to come up with and we have indeed an open plank. i think we have shown in many, many ways that we are serious about showing solidarity. the rescue package and a willingness that we say yes. if we violate the rules, we are ready to have others bring legal action against us and also familiarize those areas that have not been across the law. and all that we say to those who are questioning solidarity to stand in their willingness. the problems he passed by the ones i address quite frankly here. let me tell you. i know that we are labeled the

big economic headache of the global economy. one of those honest, we'll probably not the only headache that the global countries is what we agree on this. i am calm because i know we'll have our work cut out for us and we will be kept busy for the next two months. for the next g20 meeting, when we meet in mexico, i want to work on the agenda for growth and employment that the mexican presidency has set out an agenda apart from green growth, sustainable growth, food security and also, protection and energy. we won't need to continue to work on financial regulation and also on how can we secure the free world trade.

now, one last remark on the transatlantic relationship. because they make such slow progress on the doha round, i will probably result to a cause of action, where individual reasons will come to bilateral agreement with other regions. a gem out of south korea. we're working on one with japan although i don't consider this to be the best course of action, but also across the atlantic we have many possibilities of creating a free trade area that we do not have. we are the most important trading partners and the potential of our cooperation has by far not been tapped. we have still quite numerous obstacles that hinder us in non-terrorist area, services, investment, tactical standards to mention but a few. and i am very gratified to note

that i noticed those of the european anti-american side a willingness to work together more. it'll take some time, but there is this willingness. the part for the corporation with many others with japan, with india, with latin america apart from these classical areas that were cooperating a few many, many adversaries where we can work together closely and you wish you every success. i wish you interesting discussions. i think that opens up great opportunities for having open debate and i notice there's quite a number of plays from the social security area that are present here. i would like to tell you quite frankly, we as politicians need this kind of interest because we have seen after i we can only achieve success and can only be successful if we bring together the experience we europeans brought from the global,

financial and economic crisis of market economy has proved itself in such a sense that both sides of industry have deeply enormous for economies to be successful. to every success for your meetings here in davos. [applause] [speaking german] >> translator: chancellor, you have raised a lot of issues that are important to us. and you said that you are prepared to go into sound and a little more detail. my first question is in connection with a vision you said we need to have more -- we need to give more powers to europe. what is your long-term vision of

europe? are we going in the direction of the united states of america? how do you see the future of europe as a young man or young woman which we will ask you today, what would europe look in 20 years time? what would be your answer? [speaking german] >> translator: i actually think that we are a model in and of itself, a very unique model through the united states of america will not be assertive role model to follow. but i think what we really need is a very clear commitment among ourselves that we wish to coordinate our policies as closely as possible. but the relationship between the nationstate in europe, we will have very difficult today to have the best because particularly in germany, there are very strict rules that i laid down and also the very nature and structure of relationships. i would say to the people in a

few years time you'll be able to change your breath mint is even do these days. quite often you'll be a lot to pension rights with you. you appeal to take out insurance is. you will be able to take up the place of residence and also to work. that is something that essentially you can do already now, but there's quite a lot of obstacles to doing it. so i hope there's going to be a european patent that will come out of that and will develop out of that, where it will be more and more a matter of not only for students, but also for workers to live and work at different places in the european institutions. i think we have to react to become used like a government

with the confidence as it will be given. for us in germany, this is not all that unusual. they have their own competences. we live a stronger european parliament and the government will be something like european code of justice. [speaking german] transco chancellor, i hope that i must all countries and i don't want to create nomadic goblins here. [speaking german] >> translator: do you mean the u.k. denmark? the prime minister is here today. it's perhaps not go too deeply into that. but you were talking about the values of europe is peace,

freedom and democracy. this has always been a message that europe has given to the rest of the world. do you not believe that peace by the younger generations is taken for granted? freedom is also taken for granted and democracy is considered to be something that works very slowly, but people are starting to doubt it. what should be the message to europe in the 21st century? [speaking german] >> translator: well, i believe each and every generation needs to ensure that democracy works. we actually have to face great challenges, particularly for example of the importance of the internet and wishing people to participate, the judicial parties will have it very difficult to be able to secure

the support of the voters for all times and there'll be certain projects. and the democratic searches will change us. the general democratic principles of secret balance. i'll certainly stand up for this because i haven't seen a better model. the biggest thing i see is that a number of people who do not know the sort of democracy that we have full say to people, well, it is so slow that these politicians are not really granting. that is something that would perhaps be acceptable, believing that future generations. we have a big problem. >> translator: with president

sarkozy, chancellor, you've done a great deal to get us. your candidate away. for a number ofquestion marks over that as well. how do you see the integration in the future? how do you see the basic basis for that process that you are driving with president sarkozy? or what the problems lie in your view? [speaking german] >> translator: i believe it is someone than expected from germany and france that we showed a harmonious front when they come to council meetings and the people don't really like to when we announced something previously. so they don't like us at all when we don't like each other and they don't like to see there when we had to be agreed upon this honors before we come there and people are frustrated because they think they're the ones who call the shots

apparently. why is this important? it is important because it is not that angela merkel and nicholas sarkozy are so important, but the way of thinking of french politicians and not so german politicians come in very certain basic patterns of contradictory patterns are played out and we have to overcome them. the belgian prime minister said to me recently that elgin is actually quite a good role model because i'm a small scale, and it is in the way emblematic of what france and germany. suppose for example say who do you think you are? italy and spain are after all big countries in europe is only working with respect to a balance between the so-called bigger and smaller countries or that is not an easy turn to

have. the danish prime minister will also be able to tell us a thing or two about this. anyone who's ever been in the presidency knows how difficult it is to inform each and every of those 27 member countries as one of the same time of what is going on to overcome language barriers in a few years time but also has telephone conferences i'm quite confident in our ministers already do it. there is a common communication also need to be changed. but it's not always all that easy. it's an ambitious project. [speaking german] >> translator: dr. merkel, when you mentioned the countries that can be a presentation come you didn't say anything about russia. russia is a very important partner. could you say about russia and the relationship between europe and the russian federation in the future? >> guest: europe, as we see it i think also i would like to remind you is after all surrounded also by countries who wish to be closer to europe,

what with the example of european partnerships. the pool and ukraine are very good examples. secondly, we have a situation with turkey that we have not yet resolved and that is quite a delicate one. and we also have a relationship with russia that has been intensified with also have debate about, certainly about the process of democratization, the russia after it was a very important entity. it's an important possible market for european products. it's also very important partner for many foreign partner issues. i think i would consider them to be a very important partner, which is why so astride to substance our relationship. but that's also important and never without at the same time

it knowledge in the interest of poland. we together with poland and vis-à-vis russia. [speaking german] >> translator: with great courage and steadfastness, you have shown. is there something you doubt in your policy? [speaking german] >> translator: i am not yet all that despairing at the wysiwyg easier. but things do tend to take a very long time. sometimes i know we germans also on the one hand you have this enormous dynamism in the economic area and on the other hand, the fact that it's only the gentleman who has all of those who are participating in the political process. truly giving them their say. so i would like to ask all of

you who are here as representatives of the community, please realize that when you are parking in a democracy, it is a great thing to be and can please take a long time that processes the seven-degree also of acceptance. >> what would be your wish? how can the industry or business community support you in your work? >> the business community comes from europe can give a contribution by creating more jobs, creating thereby more hope for people. i think our industry represents out to be candid to tell us why they leave us in good weather places places in the world. we want to create jobs for people in europe. so those select from the outside have not yet invested in europe. i would invite them to take a very close look at what has happened in the past 12 to 18 months. europe will become more track to once we have gone through this

crisis and offensively convinced that we won't be able to get out of it, then europe will attend a lot of this homework. so please don't forget us when you're thinking of investments. [speaking german] >> translator: we wish you every good wish to make thank you very much indeed for having come to make this presentation features this evening. thank you very much indeed. [applause]

>> april 15, 2010 i had arrived in paris, walked into the hotel lobby, and that the crystal for the first time and he let me and he said, so you are the "rolling stone" guy? i don't care about the article. i just want to be on the cover.

i said well, sir, i think it is between you and lady got to hear commercials trying to make some joke, not knowing she would actually be on the cover. jenna mcchrystal replied just put me in a heart-shaped tub. i thought, this is a different kind of general with a different kind of story. >> over the next hour and a half on the wednesday during on management at a national amber kerry. witnesses include the inspector general and representatives of the government accountability office. [inaudible conversations]

>> this hearing will now come to order. on july 29, 2010, almost exactly two months ago the subcommittee oversight hearing on the mismanagement of contracts at arlington national cemetery. the nation most revered in secret aerial ground for veteran and their family. at the hearing, we reviewed the findings of a june 2010 report by the army inspector general, which found hundreds of mistakes this is needed with grade and gross mismanagement at the cemetery's leadership. the subcommittee also investigated how the mismanagement of contracts to implement a new automated system to manage barros contributed to those mistakes. the subcommittee found that

problems with greaves was more extensive than previously acknowledged in thousands of graves were potentially risk of being unmarked, improperly marked him as they put on the cemetery map. the subcommittee investigation also found that officials at the cemetery and army failed to conduct basic oversight. for example, arlington's former leadership approved projects to automate and digitize aerial records, which resulted in millions of dollars in contracts over a decade, without producing one usable products. in addition, there have been no review or audit of the cemetery for over a decade or two the inspector general's 2010 review. in september 2010, as a result of the investigation of this committee, i introduced legislation to address those failures. the bill ultimately acquired 12 cosponsors, pass the senate and was signed into law in december

december 2010. the lab requires two separate reports that a secretary at the army. the first provision requires the secretary to verified the identity, location and burial records gravesite at arlington national cemetery present plans to remedy any errors found in the review. this report was submitted on december 22nd, 2011. the second provision requires secretary of the army to submit an annual report for the next three years on execution of the secretary chain 2010 directive, which changed the structure and authority of operations at arlington national cemetery. this first annual report was in fact submitted september 2011. the law also requires the comptroller general to present a report to congress on the management and oversight of contracts at arlington national cemetery, including via feasibility advisability of transferring to or sharing jurisdictions of army national

cemeteries with the department of veterans affairs. this report was released in two parts on december 15, 2011. the signing of this report from the way forward from here are the subject of today's hearing. we will hear from the army's victor general, gao, government accountability office in arlington national cemetery about what the army and cemetery done to try and remedy the failures of the past. we will also hear about arlington and the army still need to do to ensure that this never happens again. the reports provided to congress reveals much work remains to be done. arlington must be put on a course that will ensure no tragedy like the one we saw unfold in 2010 if ever again reported to veterans and their family. at the outset, i want to commend ms. condon and his staff before they get on the last 18 months. mr. hallinan, cemetery staff and members of the accountability task was to materia sold to among others constitute a sea

change from what we saw under the cemetery's prior leadership. i would also like to recognize the army inspector general, both old and new. the original 2010 report issued under the leader of genoa quite demonstrates the quality and independence we expect from the inspector general community. i expect the general vangjel will hold officials accountable in his role as army inspector general. a site to witnesses from gao at nearly every hearing, you are the young and here is that the government for the work you do every day. nothing pains me more and people take political cheap shot at government workers, particularly because i am aware of the work that is done at gao, the incredible savings that she produced for taxpayers in this country every day and they dedicate shinned with which you go about your work. it's not like you're doing it for good works.

as i tell during a september 2010 hearing, i would continue my work on our attendance was confident all problems of the cemetery were fixed in we could stand tall and assure the families and our veterans that they would never again need to wonder about the location of their loved ones remaining. i look forward to continuing to work with all a few of my colleagues to make this goal a reality. i think the witnesses were being here today and i was over to their testimony. senator tester, welcome. you're welcome to make any comments you'd like before we begin with witnesses. iraq i would love to come from the casco. thank you for leading the charge to expose an address this issue. i want to thank the witnesses ahead of time. you know, when the issue this creates an mismanagement at arlington came to it initially, i said it was a black eye that needed to be made right. it is not only about honoring

and taking care of those who wear the uniform. it's about being there for families during their time of loss. and when entrusted with the remains of loved ones, it is incumbent upon this nation to carry out his responsibilities with the utmost respect and dignity. i'm too many occasions in recent memory but it is management at arlington cemetery or he remains of the american troops at dover air force base, that responsibility entrusted to people for whom we serve has been broken. they basel three, as the chairman said, i'm happy to have you here, along with mr. allen. you make tough decisions and institute a number of big refunds and i very much appreciate that. as the recent gao report pointed out, we are not there yet. and when you are entrusting the secret was on stability, there is no margin for error. so this afternoon i look forward to your testimony and they look

more forward to the discussion that will happen after that testimony. one again, thank you off for being here. thank you, madam chair. >> let me introduce the witnesses. ever since attorney general peter vangjel come inspector general of the united states army. he was appointed november 14, 201130 is responsible for investigating allegations of misconduct by army officials. most recently, lieutenant general vangjel served as the third army central at camp bearish on kuwait from september 2009 to september september 2011. i could also probably talk to you about contract team, goodnight? i know that is at the center of most of the contracting and contingent fees. fees. fees belva martin is responsible for portfolio of major management public policy issues

related to protection for the nation's critical to lg, including export control, defense industrial base coming navy shipbuilding, acquisition workforce and army modernization programs. lepore is management of the u.s. government accountability office and drag out an evaluation teams review department of defense support infrastructure, programs for base closure and realignment, and stomach can sustain it, modernization, restoration, base operations including installation services, management at training ranges from infrastructure and privatization programs and facilities energy management. catherine condon's executive director of the army national cemetery program. she was appointed position on june 10, 2010. is executive director, ms. condon's response over long-term planning and day-to-day administration of arlington national cemetery in the u.s. soldiers and their missile national cemetery.

ms. condon is hoped other military positions, including serving as civilians deputy to commanding general, u.s. army material command from 2006 until 2009. it is the custom of the subcommittees were not witnesses that appear before us. if you don't mind, i guess it is an. these were the testimony did before the subcommittee will be the truth, the whole truth and nothing but the truth so help you god? at the record reflect that the witnesses answered in the affirmative. please be seated. we will be using a timing system today. we would ask that your old testimony -- it says no more than five minutes. i will say somewhere around five minutes. this is very important if you need to go over two or three minutes in a tank senator tester and i are going to mine. your written testimony will obviously be printed in the record in its entirety and will begin with lieutenant general peter vangjel.

am i saying your name right? >> you are, not them. vangjel is just fine. connector probably used to getting that pronounced so many different ways. >> thank you for the opportunity to speak to you today for their input, support and guidance over the past 18 months. it has made a significant difference at arlington. since assuming duty in november i have reviewed our previous inspections, met with executive director, minisub for her, her team and other stakeholders involved in correct name deficiencies found at arlington. to fully appreciate the progress made, one only has to review the june 2010 ig report, which identify 61 deficiencies among them a deplorable organization clinic, archaic recordkeeping and nomination systems, uncontrolled contracting and budget process is a significant

part of graveside accountability. in contrast komar 2011 ig report identified no deficiencies and no significant progress of the cemetery letter to do to the army's direct or 21004. the efforts of executive director and her team and support for department of the army staff. in short, reported to in the june 2010 ig report had been relegated to the pass and arlington transitions from successful crisis management to sustain excellence. allow me to share just a few specifics. ..

and respond to customer calls. thus improving customer service. and a computer application for digitizing burial records has been critical in establishing and accountability based graveside and -- the 2011 inspection team at the 25 contracts covering services, engineering and construction and found these contracts are now properly aligned with contractors possessing the requisite skill sets to perform required work to standard. new acquisitions are subjected to rigorous analysis to create a more compliance and contract packet reviews for quality insurance. while we still note some errors in 2011, none were egregious and the number was significantly less than 2010. arlington now works closely with

the office of the administrative assistant and assistant secretary of the army for financial management to ensure improved oversight of the cemeteries budget formulation and execution. a transition to the general fund enterprise business system has provided full visibility and transparency of cemetery expenditures. finally, with respect to improvements, the executive director recently published a campaign plan which includes major efforts to complete graveside accountability, just long-term expansion of the cemetery and complete documentation of policies and procedures. were these and other objectives it assigns responsibilities, timelines and metrics to measure progress. with his encouraging news comes the reality that there is still much more work to do. in 2011 army ig inspection report provided 53 recommendations for continued improvement at arlington. i will highlight a few key actions. arlington's leadership in in the department of the army must finish updating relevant policies and procedures.

further, their arlington leadership must complete the documentation and validation of internal processes could procedures and controls. the resort to establish the graveside accountability baseline must continue to resolve the nearly 50,000 cases that are still outstanding. effort must be exerted to establish a multiservice policy that standardizes required assets for full honors funerals in the lab -- enables maximum utilization of finite used resources in the cemetery. the executive director must courtney but the army staff to establish enduring external oversight processes to prevent any reoccurrence of past shortcomings. the department of the army must finalize and implement enduring organizational and support relationships for the national cemetery programs. and finally the army must maintain the supporting oversight that it has provided recently to its national cemetery and apply lessons learned from arlington to all

cemeteries under army control. in conclusion arlington remains the priority for the secretary and for the army. significant process of the ig validates a secretary's approach to creating the processes, systems and management we found to be lacking at arlington in 2010. the strategy, execution according to the executive director's campaign plan was supported the army, the defense department and other federal agencies and congress will set the conditions for continued improvement and ultimately sustained excellence. thank you once again for the opportunity to testify today and i look forward to answering your questions and working with the committee in the future. >> thank you lieutenant general. ms. martin. >> madam chair, senator tester, thank you for the opportunity to appear before the subcommittee to discuss gao's work at arlington. senator mccaskill, you alluded to legislation that became the mandate for gao to renew

contracting and management issues at the cemetery. those reviews found that arlington has taken significant action to address its problems and the path forward is for arlington to sustain progress through improved management and oversight. my colleagues mr. lepore will discuss gao's work on management issues. on contracting gao identified 56 contracts over $100,000 that supported cemetery operations, construction and facility maintenance and new efforts to enhance i.t. systems for the automation of aerial operations. arlington does not have its own contracting authority but relies on relationships for contracting offices to afford and manage contracts on its behalf. these contracting authorities off the gated roughly $35.2 million in support of the 56 contracts covered by our review. the army has taken a number of

steps that the ig has alluded to since june 2010 that different levels to provide for more effective management and oversight of contracts, including improving contracts and practices, establishing new support relationships, formalizing policies and procedures and increasing the use of dedicated contracting staff to manage and improve the acquisitions. however, gao found three areas at arlington were additional improvements are needed. first, maintaining complete data on contracts. second, defining responsibility for contracting support and third, determining contract staffing needs. i will briefly summarize key findings in these three areas. first with respect to maintaining complete data, we pull together information on arlington contracts from various sources including support

organizations. however there were limitations which each of the sources. to be able to identified, contract and ensure the effective management and oversight of this contract arlington leadership needs complete data on all contracts. second, with respect to support relationships, the army has taken a number of positive steps to better align arlington contracts support with the expertise of its partners. for example arlington has agreements with the army information technology agency, ita, and the army analytics group to help manage the i.t. infrastructure. while these agreements spell out services that ita wilbur provide to arlington and performance metrics against which ita will be measured, they do not specifically address ita contract management roles and responsibilities in support of arlington requirements. although officials told us that

they clearly understand their responsibilities, the question is, what happens in the future when they are our new personnel in place. going forward, sustained attention on the part of arlington and its partners will be important to ensure that contracts of all types and risk levels are managed effectively. third, with respect to dedicated contract staffing arrangements, three contracts specialist positions have been identified for arlington but have not yet been filled. arlington is presently receiving support from the contracting office in the form of 10 contracting staff positions, five of which are funded by arlington and five by fort alvar. arlington officials have identified the need for a more senior contracting specialist and are developing plans to fill this new position in fy13.

in closing, the success of the army's efforts to improve contracting and management at arlington will depend on management's sustained attention and efforts to institutionalize positive steps taken to date. accordingly, we made a number of recommendations in our december 2011 report to improve contract management and oversight in the three areas where he found shortcomings. for the most part, dod agrees that there is a need to take action and have provided timeframes for doing so. we will continue to monitor their progress. madam chair and members of the subcommittee, this concludes my short stay in an. i will be happy to answer questions. >> thank you ms. martin. mr. lepore. >> man named chairman and members of the subcommittee thank you for the opportunity to be here today to present their findings in revealing oversight and management of arlington

national cemetery. as you know we issued a report on december 15 in my testimony today will be based on a report. i'll make two points today. for some discuss the policies and procedures with the current leadership team at arlington is put into place to manage the cemetery and ballot and if i some of our recommendations to assist in that endeavor and second, i will discuss some factors affecting the feasibility and advisability of transferring arlington from the army to the department of veterans affairs, the va. here is the bottom line. i think it is fair to say the current leadership team at arlington has taken many positive steps to address the deficiencies at the cemetery and make improvements. the army has made progress in a range of areas including improving custody procedures to ensure proper accountability of over remains. providing information and insurance and improving

procedures to address inquiries from the families and the public. halper we believe further steps are needed to ensure that changes are institutionalized and will prove long-lasting long after the spotlight has faded. therefore we have made recommendations in six areas. first, they should complete the enterprise architecture to guide new investment information technology to ensure the investments are aligned with the future operational requirements. second, an outdated workforce plan to make sure the workforce is properly sized and train. third an internal assessment program to gauge how the cemetery is doing and to make any improvements that may be warranted. fourth, improving coordination with the cemetery's operational partners, the military district of washington, the military service honor guard enjoyed based henderson hauled to ensure for example scheduling conflicts are avoided and the honor guards are available when needed. fifth, strategic plan or a

campaign plan with the expected outcomes, performance spectrums and milestones and six, written policies explaining how to assist families when a system has been warranted. the cemetery leadership has generally concurred with our recommendation and begun to implement them. we are encouraged by this. now my final point. the question of feasibility and advisability or transferring arlington from the army to the va. it is certainly feasible. as you know the cemeteries to the va in the 1970s however several factors could affect the advisability of this. such a change could have potential cost benefits leading to important transition challenges that affect the characteristics that make arlington unique among our national cemeteries. thus, it may be premature to change jurisdictions since the army has significantly improved its management of arlington.

here are some of the specific challenges that could arise in a jurisdictional change. first identifying the goals of the transfer. why the transfer should be made. second the army and the va have their own staff, processes and systems to determine aerial eligibility and scheduling and managing burials. arlington has more restrictive eligibility for an ground burials the nba for example. third arlington's appropriation structure is different than va and congress might need to address that in the event there will be a change. fourth, the army provides military -- not to be it. arlington hosts many special ceremonies throughout the year including some involving the president and visiting heads of state. finally six come arlington is one of the most visited tourist destinations in washington hosting over 4 million visitors a year. windy we do think there are some opportunities for the army and the va to collaborate or with

the benefit of both organizations but most importantly, for the benefit of our servicemembers, our veterans and their families. here are some examples. va staff, va staff is dedicated to establishing eligibility for burial in their cemetery and the central scheduling center that could assist arlington. conversely va officials are examining whether geographic information systems or global positioning system technology should be used in their cemetery but they army artier provide such services and could assist the va if that is deemed appropriate. since no formal mechanism that exists to identify collaboration opportunities we recommended that the two departments establish one, and they agreed. in conclusion, we believe the army has worked through the crisis and taken steps to put arlington national cemetery on a sustainable path to ensure effect of cemetery operations. are recommendations are offering the spirit of helping so that we

never have to come before you begin to have this conversation. madam chairman that concludes my prepared remarks and i would be happy to answer any questions that you are the other members of the subcommittee may have. >> thank you mr. lepore. ms. condon. >> madam chairman and disdain which members of the committee thank you for the opportunity today to provide an update on the progress we have made it arlington national cemetery. i want to state upfront that we still have work to do to correct some of the remaining challenges we have at arlington that was just discussed by the colleagues at the hearing today. but i want you to know that i and the united states army except those challenges and all are dedicated to restore the dignity and honor that our veterans and their families so deserved. significant progress has been made. are contracting practices now brings the cemetery in

compliance with federal acquisition regulations. an implementation of state-of-the-art technology now makes a hollow with ground of arlington one of the most technologically advanced cemeteries in the nation. a different perspective than 19 months ago when the cemetery lax stewardship, was a paper based paper-based operation where calls were not answered and where the workforce was not properly manned, trained or equipped. in the accountability report recently submitted to this congress, we examined soldiers from the old guard photograph 259,978 gravesites and markers. in the accountability task force couple those photos with existing cemetery and burial information. for the first time consolidated 147 years of cemetery rack or does, records created from logbook entries, paper-based

records and computerized burial records. we now have them in an accountable database. since the submission of the report, the total validated gravesites without any burial discrepancies is now 210,076. and we are working diligently to close the remaining 19% of those cases to bring our efforts to completion. the creation of the single, complete, verify database will soon allow families and other stakeholders with internet access to search for and produce a picture of any marker in the cemetery and review publicly available information about that gravesites through our state-of-the-art web site. an area contracting, we have made significant progress in contract management. transforming our contracting activities to position the army national cemetery program for long-term sustainment. the army has resourced or contract's up toward an oversight adding skilled

acquisition personnel to support my staff and properly training the workforce in the acquisition progress. madam chairman i do believe that arlington has made some monumental changes in the last 19 months but we continue to move forward each and every day capturing our progress with repeatable processes and predictable resorts. in order to orchestrate the many activities required to effectively run it arlington we develop the army national program campaign plan which codifies and one strategic document the long-term vision for the operation of arlington and the airman's home cemetery. it is the vehicle that i and the superintendent will use to ensure that we achieve our vision for the cemetery. it incorporates for significant the significant guidance, support and recommendation that we ever see from the secretary of the army, the gao, the army inspector general, they army audit agency, the northern

virginia technology council and from distinguished members of congress. in particular members of the subcommittee. coupled with the campaign plan we are developing our enterprise architecture technology acquisition roadmap which will serve as their i.t. and ensure that their i.t. investments are effectively and efficiently meeting the needs of the organization well into the future are going conclusion i personally want to take this time -- leadership, guidance, support and encouragement for helping us restore the faith indignity once again to arlington national cemetery. i look forward to your questions. >> thank you ms. condon. let's start so that people realize they think when i talked about my opening statement about the old guard. it sounds like cemetery's old guard, people don't realize that these are in fact active members of the army that are assigned to

the cemetery and while they are called the old guard they are anything but old. these are young men and women who have been assigned to do the work at the cemetery that we all think of, the honor guard, and i do want to point out as i began asking questions that it was in fact these young men that came to the cemetery when i went out there november and i have the opportunity to thanking number of them. besides their other duties many of them showed up at midnight and worked through the night until five or six in the morning with cell phones and/or cameras and individually went to the cemetery and photographs over 259,000 gravesites, and while some people might think of that work as something that was less than honorable, it was remarkable in talking to these young men, our proud members of

the military, proud soldiers, how on earth they were to have been engaged in this task, and i want to point that out because it once again confirms in my mind what i've learned over and over and over again as a member of the armed services committee, this country is incredibly less by the men and women in the military. let's talk about the number of graves and discrepancies. we have heard there were 330,000 graves, 330,000 graves, 100,000 graves at arlington. and now we know there are not 330,000 graves at arlington. where had that number come from? why was the number being used if it is off by you know, almost 100,000 graves? >> the 330,000 number that people quote was the number that

they, the number of people who were actually interred at arlington national cemetery. that is not the actual number of gravesites because as you know, you can have a husband and spouse at the same gravesite and sometimes even dependence along with them. i can tell you right now maam fed one of the efforts of the accountability task force will be to truly identify with the number of interred are in the cemetery and right now it's over 400,000 individuals who are interred at arlington but until we complete the results we will not be able to give you the accurate number of a number of people who are interred in the cemetery. >> so we now know that we have at least 70,000 more people buried at arlington that had been previously estimated? >> yes maam, we do. >> the additional review, we heard today that there will be over 64,000 gravesites that will need additional review.

what does that mean? >> maam i will give you a great example. part of our accountability task force is we set up business rules and one of our business rules was that we have to have at least two official documents to match with a photo of the headstone and the niche. what we are finding as reported in the task force report is that there was a period were all we had was literally a record of interment or a grave card so what that means mammas that we are looking at other sources of official data such as the social security death index and record so we can truly verify the information of those interred so that is one of the examples of what that means. >> so what you are saying is we have over 60,000 gravesites where we don't have sufficient backup and documentarian evidence for you all to be certain that you have gotten it

right? >> yes maam. as an example in section 27 which is the friedmans village section all we have are the headstone of that citizen and that is all the information we have there so that is one of the examples. >> okay. how long do you think it is going to take to get through this additional 4000 gravesites where you cannot at this point speak with certainty about who is located there? >> maam, as i stated in the report i think because we currently have a team of 40 individuals who are now temporarily working on that, we should probably come to closure by the summer. >> okay. let me go to contracting. one of the things that was interesting to me in the gao report that you all see contracting services and that to me as somebody who spends a lot of time around the subject matter. that makes me a little alarmed though. it is hard not to do contract oversight if you have one

contracting source in terms of your work but with you while using several different contracting personnel from several different agencies, i think it's really problematic that you are ever going to get the kind of control that you need. do you think you should bring it in-house or at a minimum try to locate all the contracts with the army corps of engineers or within northern contracting authority are one of these various places that you are now actually executing contracts within? >> maam, that was one of the issues i addressed immediately when taking over as exec director and one of the first things that i did was sign an agreement with to contracting agencies, with the army contracting command for all of our service contracts and the corps of engineers for all of our construction contacts. much of our contracts really our service contracts and that is

why our installation contract in command is the one who has a project of support element to will support arlington national cemetery so really we -- most of our contracts are channeled through because they are service contracts such as her landscaping etc. so i'm very confident that we have a handle on our contracts by really going to the core court for major construction projects and the installation contract command. >> going forward those are the only to contracting sources you are going to use and they are clearly delineated from a management perspective i feel confident you can keep track of of the? >> it? pie for confident we can keep track of that and the only other contracting is cometh before we are no longer having individual information technology contracts. i'm now part of the headquarters department of the army support for i.t. so i finally have support. by requirement i have to have separate contracts to support that. so i'm comfortable with where we

are going now. >> martin do you feel okay about the blade they have organized the contracting at this point in time? >> yes, we would not seek exception with the fact that they use outside sources for contracting and as ms. condon alluded to they have to means of doing that. is go to bing -- going to contracting authority and the second is to partner with army wide efforts and they would become a task so to speak so we don't have concerns with that. what it means is that just as you alluded to madam chairman, you have to do more with respect to management and oversight to get that visibility into the contract, to make sure that the requirements are stated in a way that our deliverable and you provide the adequate oversight. so it's not so much the vehicle. it's at the management, oversight and visibility and i

think ms. condon alluded to the fact that she took some actions to try to do that. >> okay. senator tester. >> thank you very and share. ms. condon as you said in your opening statement, the trust of our nation depends upon the work that is being done at arlington and rebuilding that trust is going to be a tall task. can you give me any ideas on what you are doing to help rebuild that trust? >> senator, one of the things that we have focused on is honoring the fallen and making sure that we are doing everything we can to provide information to the families of our loved ones that we have interred at arlington and the greatest step forward on that is we now have a means to communicate with those who are scheduling services by the implementation of our call center. before, literally most of the

telephone calls went unanswered. now every phonecall to the cemetery is answered so i think we have the means to show -- so our loved ones can schedule their service so i think that is a great step forward. >> that is good. how about outreach to the families? >> what we did is every time there was an issue with an affected family member, we personally worked with the next of kin on each and every one of those cases, so that they know we have been open, we have been candid and transparent with each and every one of those family members. >> so from your perspective you are 100% confident that folks are where they said they were supposed to be in their final resting place? >> when we do our accountability, there is still the possibility of human error in a aeriel at arlington but if we do discover that there could possibly be a discrepancy, we

have set procedures where we follow each and every case, where we notified not only congress but also the next of kin and accommodate with the family's wishes are. >> do you have any mechanism i guess redundancy would be the term, to be able to determine if there is a human error that is made? do you have the ability to find it quicker than one of the family members would find it? >> sir, we have the ability from this day forward. we now have a six step chain procedure. we have implemented new procedures and you know what happened prior to june 10, we have procedures on how we will handle it. call-in. ..

the information i have is three contracting organization that would contract the gao numbers. you are saying, this condon that you've taken it to to contracting out nations than those two organizations deal with all your contracts out? >> except the contracts from the headquarters with the army.

>> how many contracts with the army? >> right now it's predominately are i.t. contract. >> how many are there quite >> codec to get the exact number for you. >> okay. the whole point i think those two the oversight of those contracts. are we kidding, number one, reaching our contract and dollar out of the contracts and do we have enough oversight? bug 83 questions if you can have them. the third dryness, because you have and i understand the i.t. does with the army i don't know how you should do that. but because i was three under to contracting agencies, does that require more manpower and if you just had one and one with? what's the advantage of two? >> the advantage of two is

purely expertise. the corps of engineer expertise as construction in me court for construction. >> that's one of the optimizations. with the other one? >> the army contracting command as per services. there services such as landscaping. the next at the bottom line your opinion, are we getting bang for the buck? >> sir, yes we are. one of the things we have in place now that we didn't before as we now have trained contracting officer rep resented. each and every day we arrived there holding the contractors accountable for doing the job correctly. i think we truly are getting bang for the buck. as a matter of fact, we consolidated from our service contracts. when we started in the cemetery, their 26 contracts could be consolidated onto 16 contracts. each and every one of the 16 contracts that may be compete today came under the government estimate and we did have cost

savings by just consolidating those contracts. for example, we had six contracts by if it had something to do with the tree. by consolidating contracts to one, we react to say the government money because there is a taxpayer dollar. >> we appreciate that. that's exactly the point i get to. it's easier for oversight of there's more accountability. i'm sitting here and you are sitting there so you may be different active and i appreciate it, but that's what i heard. when it comes to tack on your contracts attack commie talk about the great states now. they are on a searchable database so you can find out what is going on. i think that's good that he should have been 10 years ago, but better late than never. the question is, as you look at a lot of businesses have been towards technology, there is a reduction in manpower necessary. i think he was the gao. correct me if i'm wrong,

ms. martin, that she recommended 200 staff. somebody recommended 200 staff people for a tune. it doesn't matter. the question is the overall length cape and you see the changes you are making. mr. manpower demand going to continue to go up? or d.c. potentially becoming static or potentially going down? >> said i was one of the things that mr. hallinan and i when we came in what was truly building the workforce that was required to run arlington properly but we didn't have before. what we are also doing is looking not only the manpower as we have now are adequate. but as we get time to assess the technology in the operating procedures, under some things we are currently putting on contract we could do from within. because we do realize that the downsizing of government, et cetera. so that is one of our goals is

to make sure that we have the right number of people. >> and i agree. although i will tell you an excuse me for taking more time than a shade, but i think a lot of times we use contractors to be set contract to us. i mean, general contractors and we can meet do not in getting more efficient before the dollar. quite frankly. we could get more money to the ground and more money to get work done in this contractors pockets, which is ultimately something pretty to important in this whole thing. i can tell you that in mind and chair knows about this as much as anybody, but to contracting that goes on in government right now, maybe with your exception and this has changed in the last 15 months or so, but almost every contract is investigated and to his waste, fraud and

abuse. i would just say thank you for the work you've done. thank you for the work you're going to do. i very much appreciate it. that is not to take anything off you guys. i just let you off the hook yet i'm sorry, should've asked you the question. thankthank you very much comingn and share. senator pryor. >> thank you for having this hearing. is important and i appreciate you doing it. general, if i may stay with you and the lessons learned area. i know you spent a lot of time on arlington national cemetery and i appreciate that. do you have concerns there may be other owing 10 cemetery for they are out there with other national cemeteries? >> as far as the other national cemetery is concerned, and airmen will pretty much focused on not. ms. condon has a plan to get after that issue works through

the arrington issue. we do have 28 other cemeteries that are out there. and quite frankly we are starting to take a look at that as well, based on public law in the nba a 2012 they've asked us to look at service academies cemetery and we are getting ready to launch unmanned now. we will be participating with the department of defense to look at a statistical sample is cemeteries out there appeared clearly from our date, we are looking forward to look at what else might be out there. we have no indication at this point that there is anything, but we want to make sure we don't have another arlington out there. >> no indications at this point? >> not at this time, no. >> i know that the gao made several recommendations and one was enhanced collaboration between the army and the veterans affairs on ways to improve operations. i understand that there hasn't been any sort of formalized

working group. is that fair? >> i think where we're at right now, senator, if we have the department is looking to collaborate with veterans affairs. ms. condit is the best position to look at what we need to do with arlington national cemetery. there are some things that have gone on however. the immigration of the scheduling system, for example with imperial operation support system that the va runs. there's work ongoing right now to take a look at how we are going to align for the automation digit, a few well, to make that compatible so information can be shared back and forth. in terms of the internal assessment program that we are so concerned with for arlington and witness condon house on her campaign plan company operational assessment in action regimen at the va uses is being

incorporated. mr. hallinan of course with his expertise in being a superintendent at the cemetery is taking advantage of using that document as a base document for that which he might use from this internal regimen. there are a number of different aspects right now going on at a lower level. really the intent was to start at the ground up and find out where we need to have some collaboration and coordination and it will be pulled up over the next six months. we look forward to seeing something of a go back to arlington in june, july the summer. we have another look we have to do them were looking forward to seeing some of that. >> ms. condon committee of any comment on that? >> fair, we are working with veterans affairs. not only from an integration of a scheduling system with burial operation system, but we also have an agreement between, for secretary of the army and secretary of va, where we leverage their training.

we have sent several of our employees to the va training program and we are looking at having a way where we could have been turned back and forth between the cemeteries. one of the things that we are also looking on as we are probably a little bit further ahead right now for mejia's facial standpoint that we would like to share that with va because of this stems the party take into geo-spatially managed our cemetery. >> one of the other recommendations that the gao made was in how you should interact with family. now, sounds like there's a set of recommendations they are. what is the current process for notifying the family if you guys have identified an error? what is the proper -- but you do now?

>> fair, when we identified here come the first thing we do this the research research to make sure that we have followed this fax from a cemetery give. a man, and the next step is to notify the next of kin and to explain the discrepancy we may have found him to discuss with the family how our plans for iraq to find whatever discrepancy that is in accommodating the family's wishes on if they would like a chaplain, if they would like to attend, if we have to do all of that. so there is a set procedure that we use for each and every case. but the bottom line is we immediately notify the next of kin when we find a discrepancy that could impact their loved ones. >> is that no written policy? >> fair, it is now written policy. >> also, just from a background information in the can of problems arlington date, most of these problems happened during a

set period of time, or do they go back to the beginning arlington and is the function of the age of the cemetery. >> the age of the entire cemetery. >> what happens if a family member comes to you as i think there's a problem, what is your process then? >> of the family member comes the problem, the first thing we do this research to see if they're truly could have been a problem with that family member. >> okay come as a family member reaches out and contacts u.s. doesn't want to make sure that my loved one is where he's supposed to be and everything is copacetic, thinking? secrets of the process fair? >> where the process fair commissary. most of our burials are great site burials. so we have a process for a stalemate that has a concern. part of our accountability task force is that we verify not only the heads down in the records

that match a great site. >> there's been some discussion about electronic database. are you saying that you are putting every person buried in arlington and electronic database? >> every person bearing arlington's records will be an electronic database. we are working on that. i was part of our accountability task force and part of our geospatial effort as well. we are months away from actually having the application, where you will not only be able to find your loved ones records, but we will have an application on one of your smartphone to ologies that will literally take you to the actual gravesite, which is why we started our accountability task force by using mark on technology with old guard taking photos using his or her phone because that was our long-range plan for public facing applications for the general public.

>> a virtue of having a database in the attention this issue has received over the last year or two, do you think these problems are now fixed going forward? >> the same accountability that we are doing for the task force is how we are going to account for each and every burial that we have at arlington from this day forward. as a matter of fact, procedures are in place. our workforce is now taking photos of the headstone and not she met up with their automated records. >> thank you. thank you, not a chair. >> i will say n-november i had the opportunity to look at the procedures now in place. and they are -- there is a lot of redundancy. it will be very hard for them to lose track of a burial site and what remains are located there based on the process is now in place, which is a big improvement. general vangjel, i was worried

about the i'm obligated funds issue. you know, i don't think any to tell anybody that is testifying today that we are trying very hard. i think there is a newfound sense of urgent he and congress to watch every time that is spent and to be accountable for every dollar that's obligated. so imagine my can learn that we have $15 million in obligation that were out there that it never been spent. and in fact, the army audit agency found that due to poor financial oversight by the previous administration of the cemetery, $27 million in applications between 2004 and 2010 were made and never disperse. now what worries me about this is that nobody noticed. that clearly the systems were not in place, that someone wouldn't have some kind of

notification that you had significant obligated funds that had never been dispersed. i know we recover part of them. what about the other 12 million on dispersed funds for any of you? and what kind reassurances? maybe i need to talk to army audit here is that of inspector general. if i were the inspector general, this would get my attention because i would wonder where else are there on obligated funds hanging out that we could pull that for the taxpayers to be put for a more import and use or better yet back in the treasury? >> i couldn't agree with you more, madam chairman. one of the things we'll be doing this summer. as you know, the audit agency to come down and look thoroughly at arlington is records come existing records in place. in spite of the previous regime's assessment that they were short of funds, they in

fact had fun that they couldn't account for. i have to give credit to the current executive director because when she came on board, the first thing she wanted was his ability i lived in june under the general fund enterprise is a system that enabled them to begin to account the army audit agency with the assistant secretary for logistics and technology both at program management reviews and audits and they were able to uncover some 15 million that essentially has been reconciled and put to good use because ms. condon did not want to submit a budget request until she knew where the money was. that's good stewardship from our day. however, what would want to do is make sure when they come down for a second that this year coming up next year, we want to make sure we've got is that the agency will come down a subject not shared country matter experts as the overarching ig

inspections so that we've got appropriate oversight. but your point is well-made as we look to other activities ongoing in the army. we will most certainly take that back because there are some things as we look at oversight mechanisms right now systemic ways, we've got to make sure the readers i mean our money appropriately, wisely in the right places in accordance with their senior leader tightens. i'll take that one back, madam chairman and we work through that with their subsequent actions we do throughout the army. >> if this wasn't transparent, if this wasn't obvious and clearly it wasn't, and i think he would be very helpful for someone at the most senior level at the pentagon to take a look at this issue. entre obligated, but not dispersed here but kind of systems are in place in the various parts of their military to make sure that we don't have this going on? i have to believe their systems

at their place is because for one thing, i've heard too many whistleblower stories about getting rid of stuff at the end of the budget year because if you don't spend it all, they'll think you don't need it the next year and horror stories about fuel being dumped and so forth so that they can ask for the full load the next year without having to admit that maybe they had used it all the previous year. that goes on in every part of government, not just the military. but those worries me. this is a troubling sign beyond the problems that are represented. i will follow up with other people within dod to talk about that. but it is a problem. in terms of the va, first of all i'm glad to hear that your crosstraining. that's a great idea especially since the train for cemetery is the necessary. i think it is terrific you are utilizing the great skill set

and core competencies at the veterans administration when it comes. i visited one of the cemeteries in missouri because i wanted to compare and contrast what i have been at arlington at the height of this mass compared to what is ongoing at a cemetery. i went to a cemetery in springfield, missouri and i was very impressed at what they had done there in regards to tracking and maintaining. in fact, one of the things i thought was terrific success the office was closed, there was actually a kiosk outside the building, where a visitor could pull up but they are named exactly what they needed to go in the cemetery to visit their loved ones without having to involve and a personnel of the cemetery and not question or that answer. very impressive. i am assuming that the geospatial technology that you embrace dean, do you envision not only can people do this on smartphones, the kiosks at

arlington for people visit outside business hours that the administration can actually get that information. >> man come as a matter of fact, just this past week we are in alpha testing for our kiosk that we are going to put throughout the entire cemetery and visitor centers should do exactly that, where we'll actually print you a copy of the map that will take you that way because of the acreage we have at arlington, will take you to the gravesite. we did take that from a pa was doing and they're going to have kiosks by sometime late spring. >> so how about gps? are you going to be able to -- let's say right at arlington with their smart found and i went on, is there going to be an application i could download that i could go one, enter the name and it will actually guide me like a gps to the gravesite? >> man, that's exactly what we are joined by smartphone application. we're months away from doing

that. >> i was worried when i saw the article in the "washington post" yesterday that they had to have some problems in the va and, you know, isolated obviously, but i am pleased at least they are taking a look because obviously the scope and breadth of the va system is people don't realize all the cemeteries in the country and every state are run by va, that we are the only two exceptions being the two we talked about today. arlington and the other cemetery the army runs. let me do this. i want to try to leave open the door for the next year and that we will have on this because i am not going to stop until whoever does that is it's running on 10 cemetery can say we now have a handle on every single gravesite and we are not there yet. we've made a lot of progress in 18 months. i would like each witness to state what you think the single biggest challenge facing

arlington and at the present time. what remains did she think is the biggest challenge that has to be tackled and accomplished as we look towards the next 12 months of progress toward full accountability and transparency for the sacred site. let's start with general vangjel. >> thank you, madam chairman. the biggest problem that exists is to complete the accounted for the gravesite accountabilities. if we are going to establish trust and maintain trust for american people, folks want to know. they want another problem is solved, but it's gone away. that's the biggest thing that would face us in order to get there, there is an sop is, document the need to be done. documentations we can transfer. as you mentioned earlier, whoever that arlington cemetery come we want to make sure the rare procedures and documents are in place to facilitate a transition for the current executive or to one that would follow. those would be the two biggest and i think the other one that

if i could just add one more would be the overall long-term expansion of the cemetery to be able to accommodate the burials. i think that would be one other that we need to really make sure that we've got the right plans that have been executed. i know ms. condon and her campaign plan has gone after that and in my mind, man, those are the big three. thank you, madam chair. >> i will certainly fall back to the area i am most familiar with coach's contract management and oversight. you mentioned the fact of the funds that have not been recovered. that is especially important to have accurate contract data because that allows you to be able to track and identify where the funds are. and i report, we talked about the fact arlington also has no money. so with money that does not have a fiscal year kind of day and didn't come it is even more important. >> why is that? why is that bad arlington

doesn't have a fiscal year like every other part of government? >> well, at least the funds -- some of the funds for the cemetery are no year funds. >> i know, but why? why is that? can we change that? >> in terms of why come i don't think arlington or the army would come forward to ask it be changed. i'm not sure. there's some history there in terms of the fact that it is know your money. >> that's exactly what led to this problem. setting a different set of rules for arlington contributed to the lack of accountability at arlington for many years. if a worker brave whistleblowers, we still wouldn't be where we need to be. people who worked at arlington new things were going badly and nothing was happening. part of that was this no year and 98. is there a recommendation that should be made that we should end the notion that arlington

should not a fiscal year appropriation and caning videos with? >> well, senator, we did not look at that as a part of our audit. the gao is on record as saying when you have no year funds, obviously there's more accountability involved in that. so from the do for me or from gao and contracting going forward, i would say it is the insight and the oversight in terms of contracting important. there are still some things that need to be done. senator tester talks about the importance of looking to see, can i consolidate ms. condon and her staff is certainly done that. she mentioned having several contract for landscaping and now they have fewer contract. all of that is important. leveraging the expertise of ita, all of those are very important steps. now it is a matter of getting that insight in continuing with

the oversight of the contracts for markers that it is very important going forward. >> not an chairman, asked what we thought were sort of the key key things that the cemetery needs to focus on going forward. i certainly agree with my colleagues has stated today. i might also suggest one of the key things from where i sit is going to be ensuring that the changes that has been made to date are set damnable and will outlive the current leadership team. i think to their credit, the review that we did suggest, they have begun the process of editing if you will, from going through the craze says, working through the crisis in beginning to put in place the kinds of policies, procedures and systems, that if implemented fully in the campaign plan is a great example of that, if fully implemented, should outlive the current leadership teams we don't ever have a situation again, where it takes herculean

efforts from very dedicated senior people to make this work. the whole i.t. i hear it eventually they will move onto some other thing, whatever that is. some other stage of their life. whoever the next generation of leaders are coming into arlington shouldn't have to reinvent the systems -- >> a turnkey operation. absolutely. it seems that's where recommendations went and i think that is the key issue for them right now. >> ms. condon. >> senator mccaskill, if i could address the no year money. the arlington wise designated as a civil works that committee. and hence it was a no year find. one of the first names that i did with the help of our assistant secretary for financial management is to put in an accounting system. now that arlington is part of the general fund enterprise

business system, we are not fiscally transparent. the financial management community can now see how we expand each and every dollar. the benefit is having no year money was one of the benefits of being able to recoup those on the corrugated obligations from prior years and be able to apply them to the projects we have ongoing right now. because of those on the corrugated obligations, we are able to start and finance and able to put in all of those i.t. is his shoes were able to address and put it to knowledge you buy the right equipment to get arlington where it is today. having no year money from my perspective has really been a benefit for myself to truly put in changes we need. not that we are fiscally transparent, it doesn't matter if we are one year money were no year money. every dollar is now in the accounting system being

monitored at every other process in the army. >> i'm confused. i think everyone would like to know your money. >> yes, ma'am. >> bloomington many feel because no one would feel the need to hurry and stand year-end. there's arguments that can be made for that. on the other hand, we have an appropriations process that is a manual process in the justification on an annual basis. i'm not also has a great deal of merit in terms of fiscal accountability. i understand you can use money that wasn't used for other things you need it, the most arts of government have to come back and justified to congress that they have additional means that there should be appropriations for them. i have a hard time believing that arlington would difficulty getting it reparations because they think this body has great respect for what that represents to our country and to find it

appropriate and trained to take her to think that, that may be the year-end fund is a discipline that everyone should have. i'm not asking you to say yes or no. i'm just thinking it something that we need to take a look at. >> understood. we do report the kerry of a very similar to the working capital fund you carry over from year to year. you asked what is the most outstanding challenge that from my perspective we are facing at arlington right now? as you know and as you've witnessed, the incredible changes to the business process is that we have in place to arlington. what i need right now is the patients are asked to allow to look at those processes to make sure we have the right metrics, that we have the systems rate so that we can truly sustain the changes that we've made at

arlington up until this point. we just need to test all of the i.t. support and all the changes we made to the operational procedures. so what i just need now is my biggest challenge is patience because in this next year, that is that the superintendent and i are doing is to make sure those changes we have put in place can be sustained for generations, not just for the immediate future. >> i want to thank all of you for the work on this. there was quite an undertaking for those out there skeptical about the ability of governments problems on a timetable, i think this is a great poster child for people deciding that this work was important and it deserves lots of eye and a lot of effort from a lot of people appeared i think that the army -- and i've

said this to top leadership in the army, i understood that the army was more upset than anyone else about the problems that arlington. disc disc and bemoan the incompetent that had occurred there. but i don't think anyone felt more acutely than the army. i think the army responded in a way that reflects the dedication they have to the fallen. and i am impressed that the amount of progress that has been made a substantial and significant. frankly at lightning speed for government. within 18 months we have a completely different protocol at arlington as it relates to accountability. and i think it is good. we still have work to do and i said from the beginning that the oversight of this committee would not end until people sat

in front of this dais and said, i think the challenges have been meant and i think all the processes and procedures are in place and i see no problems that can be addressed by additional oversight. no one said that today, so we'll have another hearing. i'm sure it will be a year from now at the appointed time and she'll have more information to report because i know you are planning on going back out to take another look at arlington i may want to complement ms. condon because even when things were discovered that were not good, her off is checked in with this committee and let us know that another problem had been discovered. i think it might've been a tendency to say we'll never know. ask if get it fixed. there has been transparency and not is very good. congratulations and most particularly congratulations to all the men and women who have worked hard at arlington, many who care deeply about their

reputation in the method with which we take care of the problems there. and thank you to gao. we will have another hearing in about a year. in the meantime come of problems surface i'll continue to let us know and will continue to monitor the situation. thank you for the good progress but the meat. this hearing is adjourned. so i'm not [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations]

>> i do believe that for all of it historical shortcoming in discussing the shortcomings because they have to be amended. for all of the shortcomings, the west still today represent the most acceptable and workable university workable political culture.

>> over the next hour, several views of the administration's new health care law. the national association of health underwriters hosted an event that included comments from steve larsen with the centers for medicare and medicaid services. this is a half-hour. >> thank you for inviting me here today. i have been looking forward to the opportunity to speak today because there are so many important health care reform issues we are working on. i have to say i had a lot of positive experiences with their agency brokerage in the underwriter community. again, i'm really pleased to be here. you all -- and i know this from my past six years can really are critical partners in the health care system and certainly and

the implementation of health care reform that's going on now. there are so many opportunities ahead and i know you've been working hard here in washington and across the country to facilitate implementation and you respect his state. i just want to share with you this morning some of our thinking at hhs on some of the key issues relating to implementation of the ata as we caught and particularly with reese back to exchanges and state-based exchanges. let me start by saying that we believe that the success and effective functioning of the exchanges will depend on a strong for the asia broker community. we believe that the aca creates an infrastructure that preserves an important role for agents and brokers and also will soon provide you with significant business opportunities. you probably know these numbers,

but the cbo congressional budget office estimates that more than 14 million americans looking access to health care for the private coverage options and the exchanges by 2015 and up to 22 million in 2016. the cbo estimated 2 million more people will be enrolled in employment-based coverage in 2014. other estimates from rand health care in the agreement to to confirm these projections and project did a businesses, particularly by small businesses are going to increase significantly under the aca. these businesses are going to be accessing this coverage in many is through the exchanges as part of the expansion. so again in short, as it is that the private issuers because this is a private market raised expansion, the aca is a major business opportunity for you

all. and you, i think are going to be central to success of the exchanges particularly with respect to this shock exchange. you are the people that are trusted to help them navigate the system and your small business owners yourself. i want to share with you a cup of finding that we at hhs has found instructive. you may be familiar with some these. in looking at the material a tear, for extent will come his state of pennsylvania recently did what i think is a pretty dense of survey of small businesses and mall business employees on health care changes. and first disunited rights come unfortunate to have a site as mrs. don't offer coverage. again i see no they typically cite the cost of coverage as the main reason that don't offer coverage. the current system is ready

affordable care is so important in the issue rears he can to address. for those businesses that to access health care regime information, agents and brokers on the most trusted source of the information, more than the company website and at least for now, more than government website. the 23rd team and 20 for team, exchanges we believe will become the key vehicle for health care information and shopping for individuals and small business. but we think they will do so and working in tandem with, not in competition with you all. they can come in sources of information for so many people today. we recognize this and we think the states recognize there's a large part to the work you all are doing in the state. backup of examples, maryland's advisory group on exchanges

recently issued a report, emphasizing the important role to agents and brokers play in the market today. the report found that 90% of small businesses who purchase insurance to assault her producers. insurance advisory committee recommended the king of partnering with an itching resource for their in the states to make sure that the shock exchange will meet the ongoing needs of businesses. utah as he now has developed an exchange that focuses on implementing employee choice and employer defined contribution option in their small group market. this is even before the full market reforms have taken effect. the exchange also relies heavily on the wall and has assured agents and brokers uniform condition inside and outside the exchanges and we're going to

combat that. other states are following the lead. we know that the experiences in massachusetts when they first started out and also in california point to the need to work collaboratively to ensure a successful exchange experience. we at hhs certainly expect there to be a large number of state-based exchanges, but we do realize there are going to be some states only get 2013 and 2014 that are ready to operate a steep-based exchange. i want you to know that we are going to continue to seek your input and your advice as we develop the shock exchange is in the states in which we are operating federally facilitated exchanges. we had an exchange with her team and we look forward to have been a bad input over the coming

months. as we continue to develop exchange policy, there are some guiding principles for a as we think about another set of regulations engage in any operational development of federal exchanges. first, we recognize that the shop exchanges on exchanges generally have to offer a simple and efficient and appealing process for individuals, but for employers or employees for agents and brokers and all the stakeholders and their. that's critical. exchanges have to add value if they're going to be effect is. we think they will in terms of the ease of shopping experience and efficiency on both the administrative expense is another cause is as well. okay, they said we anticipate that your community will continue to be involved in selling players purchases of coverage in the shock exchange.

into this time, we believe we can accommodate in the technology is that we are looking at, a way to ensure that producers are compensated even were employers or individuals enrolled through the exchange. and we are actually in the process of designing and looking at tools, specifically to help you all explore and present options to employees and employers and individuals to facilitate enrollment efficiently and the coverage they select and manage your book of business to the exchanges. a calendar development. thirdly, again, i think you know this. if the commission on the shop products are not equivalent to those outside of the market and risk creating incentives. so, that is a quick survey of our guiding principles as we

think about how to operation of the federal exchange, which will be a small member states and the states we hope our protect into transition to a full state-based exchange@2014, then afterwards. so i want to share with you some of the statistics that we look at it give us a reason to be up to mistake about the progress that states are making. let me run through some of these. first of all, 46 states have become background research on their markets, their capabilities and 34 of the states research. almost all the states, about 46 halves continued the process which is required by the aca to have regular meeting with stakeholders and development of their exchanges. one of the most important thing states can do is to assess their

current i.t. capabilities, particularly as it relates to enrollment in medicaid and the merger and send the feds of the single point of entry as a comment to exchanges. 43 states have initiated what we call this i.t. information technology gap analysis. 33 states have completed that initial analysis is a precursor to the subsequent work and procurement that they do. we are very encouraged by that. 17 states have drafted their business requirements for key function, such as the plan management function. eligibility. why three states, almost half that developed the government not all. many have appointed or in the process of appointing a governing body, whether it's advisory board are sometime a decision teams. time had developed pilots. seventeenth date for different types of authority to start

exchange where there's legislation in executive order. one of the big ones that we focus on is the number of state that have received what we call the establishment exchange establishment funding, and significant grant program provided for the acs. today we have 28 days i have received establishment grants to conduct the process of establishing exchanges in their state. we have obligated over $700 million to the states to do this work could review this is a key measure of success, key measure for potential to operate their own exchange. we just had another deadline recently in december for states to apply for another round of establishment grants. do we anticipate making another round of reward in february. again, we're very encouraged at the member states that could

come in. we can talk about specific state until decisions are made, but i would very much at fact that we would be well over 30 states that have received significant funding under this establishment grant program to proceed with their development. some of you may have seen last week he did issue a report that again summarizes some of the progress that state are making. the report doesn't go through all of these 28 states individually, but the pilot of the interesting examples of how states are working to create their own exchanges. again i think you know this, but these are states kind of a cross to geographics ekstrom, across the political spectrum, which we find very encouraging. in alabama, governor bentley first how to commission recommended alabama established its own exchange and legislative

leaders do not date have supported creating a state-based exchange. one of the leaders out there in colorado passed the bipartisan bill to establish a colorado health insurance exchange and there has been a lot of key involvement bakery groups, national federation of the nfib locally, colorado association of commerce and industry have all been active participants in creating the small business component in nevada. unanimous bipartisan support for the legislation that authorizes their state which the governor signed legislation back in june. so again, we are pleased to progress states are making out there. we are working extremely hard to make sure that we are getting the cadence that state need to proceed with their decision-making from this. we know we put out a set of five

different rules in july and august of last year and we no states are hungry to get additional guidance to have those rules finalized. we had a number of formal and informal discussions with the state to gather a the type of information they need to proceed so we are looking at that. we issued a number of anything significant pieces of guidance to states at the end of last year that he may be familiar with. first of all in november, we posted a set of what are called frequently asked questions, faqs, one of the ways we convey information to the stakeholder community and a whole range of topics we've gotten a lot of questions on, like our the exchanges going to be funded? is it going to cost us anything if there's a federal exchange in our state? questions about how to eligibility were?

if we want to eligibility for medicaid, but not eligibility for the advanced tax credit, can we do then is the one state-based exchanges? we said yes. are we going to coordinate with the local departments of insurance, which is of course something i'm very sensitive to. i'm not one for example, we've indicated clearly that we intend to preserve the traditional role of the state duis to do as much as they are willing to do as much as is practical if we run a federal exchange and steve. it can come into play in the whole number of areas, whether it follows the life certification of two hp using race as well. so it done, we want to be able to rely on the state as much as we can ultimately implementing federal exchange. we intend to issue further guidance of states in the coming months about those and other

issues. we also met n-november q. and a clarified that states have a longer timeline to request funding from the establishment grant program that i mentioned. for example, if the state isn't quite ready to be certified in state-based exchange come january 13 which is not that far away, they continue to get funding if they think maybe you're later they might be ready. i think maybe you're familiar with some ideas we floated last year, which is well, it's on a black-and-white situation either stay pace of federal exchange. we can have a federal exchange, but the state can perform many key functions even where the guidance without lasher said you can get funding for those state-based functions, even where there's federal exchange. i think we provided a lot of latitude and longer on ramps for the states to get to the

exchange of the state-based exchange. i think you also now. you may have heard them in december we put out a bulletin on essential health and assets. we wanted to make sure that as states are coming into their legislative sessions this year, that they had i. guess a sense of our thinking that we will go with hp's. in the bulletin, we indicated our intent to propose that essential health benefits be defined using a benchmark approach. again, the bulletin is an expression of what we can to buy propose to unfindable. again, it gives states the benefit of what we think we are having a we've gotten a lot of good reaction from the states i'm not. i'm not one follows the rule reads used in many exchanges, which is try to leave the states as much flexibility as we cannot implement their exchanges.

in this case, states have the ability to select from a number of different benchmark you better out there and that would be the essential health and fit practice. one was existing market race packages, like small group market benefit packages. so again, we think doing that is consistent with what is intended to be affordable care act, but avoid market disruption and also gives states the flexibility to look to their own benefit packages that they think about what critical for the benefit package and their state. we are continuing to reveal all the comments that we got in for the set of regulations we put out lasher that is a key part of our process. we also work closely with the department of flickr to develop and provide guidance on a lot of the employer based issues relating to employer responsibility, employer-sponsored verification,

disclosure of tax data and other technical issues that the employers have to deal with in connection with the offer of coverage and exchanges. one of the other important things on the horizon for us being uptight about what is the federally facilitated exchange look like? i share with you some of the principles we think about in terms of the shop exchanging your role, but we get a lot of questions from state development. but is that going to look like? when we put out our regulations last year, providing flexibility to the states as a fedex exchange for key decisions like i was the plan manager going to work or network adequacy or is it going to be enacted purchaser model for an open market model? all of those decisions we laughed, we have to make those decisions only implement the federal exchange and how are we g